The following information extracted from the parent company

a$.$ Parent company loaned $$1000$ to Subsidiary with an interest rate of $5\%.$

b$.$ Parent company made a sale to Subsidiary for $$500$ cash. The inventory had originally cost Parent company $$200.$ Subsidiary then sold that same inventory to an outsider for $$700.$

c$.$ Parent company made a sale to Sub for $$800$ cash. The inventory had originally cost Parent $$300.$ Subsidiary has not yet sold that same inventory to an outsider.

Required:

Pass the elimination entries for the intercompany transactions.

Answer:

Q$2.$ Explain the differences between translation and remeasurement of financial statements of a foreign subsidiary.

Answer:

Q$3.$ The partnership of Ibrahim and Rawan has the following provisions:

$•$ Ibrahim and Rawan receive salary allowances of SAR $50,000$ and SAR $15,000,$ respectively.

$•$ Interest is imputed at $5\%$ on the average capital investment.

$•$ Any remaining profit or loss is shared between Ibrahim and Rawan in a $3$:$1$ ratio, respectively.

$•$ Average Capital investments: Ibrahim, SAR $300,000$; Rawan, SAR $150,000$ 

$•$ Net income SAR $300,000$

Required: pass journal entry to allocate the profit between Ibrahim and Rawan

Answer rating: 100% (QA)

Answer For the provided scenarios lets break down the elimination entries for the intercompany transactions then answer the question about differences between translation and remeasurement and finally ... View the full answer